PROBATE
What happens to the mortgage during probate?
By Steve Lockhart
The short answer
A mortgage is a lien, and liens survive their borrower. Nevada law is explicit that a home given by will passes subject to the mortgage, with no requirement that the estate pay it off from other assets.
Full answer
A mortgage is a lien, and liens survive their borrower. Nevada law is explicit that a home given by will passes subject to the mortgage, with no requirement that the estate pay it off from other assets. What this means in practice: the personal representative keeps the payments current out of estate funds, or arranges income from the property, until the house is sold, transferred, or the estate decides on another path.
The lender's rights are protected regardless of probate. If the estate stops paying, the lender can default the loan and pursue foreclosure on its own schedule, and probate does not shield the house from that. Because the mortgage is secured, the lender holds a claim that rides with the property, and it gets paid at closing before any unsecured creditors or heirs.
There is real protection for family members here. Under the federal Garn-St. Germain Act, a lender generally cannot trigger the due-on-sale clause just because the homeowner died and the property passed to a spouse, a relative, or an heir. That means an heir who receives the home can often keep the existing loan, with its interest rate and terms, without refinancing. That is a meaningful option when rates have moved. The estate's attorney and the lender can confirm exactly what the loan documents allow in your case.
A note about legal guidance: Steve is a licensed Realtor, not an attorney or a tax advisor. Probate, estate, and related tax questions involve Nevada law and IRS rules, and the specifics of your situation deserve a review with a probate attorney and a CPA who know your case.
Go a little deeper
Frequently asked
Questions people often follow up on
Who makes the mortgage payments during probate?
The personal representative, using estate funds. If the estate has no cash but the home has equity, the usual solution is to sell promptly, because an empty house kept current only drains the inheritance.
Can the bank foreclose during probate?
Yes. Probate does not pause the mortgage or stop foreclosure. The estate must keep payments current or resolve the loan through a sale, a short sale, or another agreement with the lender.
Can an heir take over the mortgage?
Often yes. Federal law generally prohibits the lender from calling the loan due after a death transfer to a relative, so an heir may keep the existing loan with its current terms rather than refinance.
The Lockhart Method
The Lockhart Method
Your Home | My Strategy | Proven Results
My strategy: put the mortgage math on the table in week one. The payment, the payoff, the rate, and the equity decide the estate's moves, so we model sell, keep, rent, or surrender before the family is surprised by a foreclosure notice or a shrinking inheritance.
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